THOUGHTS

Essentials for a Successful Route to Market Strategy

Apr 24, 2019

What is a route to market strategy?

A route to market strategy, also known as a sales execution strategy provides a roadmap for companies to get their products from the factory or warehouse to the end-users, customers, or distributors. The primary objective of a route to market strategy is to ensure that the products reach the clients/customers in an efficient and effective manner, thereby ensuring satisfied customers and increased sales growth.

Developing a high-performing route to market strategy involves focusing on the right markets, with alignment to the behaviors and needs of the customers in those markets. Furthermore, it is vital to choose the right sales channels, products, and value propositions, which would consequently result in a company that delivers high revenues, profitability, and customer loyalty. Experts at Infiniti Research have provided some general guidelines for achieving a successful route to market strategy:

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route to market

Start with the customers

Route to market intelligence involves identifying the depth of understanding that a company has to its customers, their expectations, behaviors, and needs. All route to market decisions largely depends on this kind of detailed information. Businesses must only sell products that customers need and are willing to buy. To gain a better idea, they must interact directly with the customers through focused interviews, customer surveys, or prototype testing. Then, understand what makes the company’s products or services add value to the customers. It is also critical to evaluate the best channels to reach out to the target customers.

Low-cost channels for improved profitability

Sales is an area of business that can have the greatest impact on profitability, especially if it includes selling some of the products through lower-cost channels. The challenge here is to understand which channels can be used for which customer. While some products and sales transactions require more complex and expensive channels, others can be maintained by lower-cost channels such as telesales.  Therefore, utilizing the correct channels can significantly affect profitability.

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Balance between market penetration and control

Using a global market coverage route to market strategy with a mix of channels can result in channel conflict, margin erosion, and even dissatisfied customers. This is especially true when channels are not closely controlled. To stay in control, it is important to identify these potential risks. For instance, several luxury brands maintain quality, stability, exclusiveness, and ultimately, high margins on a defined segment of the population. At the same time, they forgo the fact that they could probably sell ten times as many products as they manufacture, but at a cost to brand image and market position.

Products sold and channel should match

Businesses must ensure that the products that they sell and the channels that they choose are suited to each other. They must try to sell products through the channels that customers use to buy the product that is being sold. It is also necessary to resort to channels that give economic sense to the point of sale. This means, avoid using expensive channels to sell cost-based products which are not unique from others in the market. An effective route to market strategy is to use low-cost channels for such products.

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